The Muslim Brotherhood and global capitalism in Egypt

In the wake of one regime ousted in Tunisia, and another grappling for survival in Egypt; 2011’s call to arms against North Africa and the Middle East’s status quo is in open season. This sudden spark of revolutionary zeal has sent tremors through the Arabic world as its rulers and theocrats scramble to dampen social dissent and restore calm. Cairo’s Tahrir Square, the centre of ceaseless protest since January 25th against the thirty year rule of President Hosni Mubarak has embodied this – an embattled symbol of a region’s disquiet over widespread corruption, police brutality and pseudo-democracy. Mubarak’s allegiance to the US and Israel, an outpost of Western influence amid a sea of Islamic states however, has implied no transferral of power will proceed without a fight. US interest alone is nevertheless by no means sufficient in preventing Mubarak’s departure and thus prompts speculation of economic fallout if events continue to mitigate.

US unease is predicated on the creation of an Islamic state by opposition groups, engineered by its radicalised extremist wings of the Muslim Brotherhood. Adopting Sharia Law and shunning its past nurturing pro-market approach, the nation could be subject to capital flight as international investors lose confidence. The validity of this line is altogether less certain as Egyptian assets only form a fraction of global markets. Out of the 166 worldwide funds in equity and bond assets, approximately $13.4bn is traded in North Africa and the Middle East. This is miniscule is proportion to $23.7trn invested worldwide by the end of 2010’s Q3, according to Washington’s Investment Company Institute (ICI). Therefore international speculation isn’t everything to an economy’s success as the case may appear.

Notwithstanding, the advent of a Sharia law-based economy may interfere dramatically with Western business practices the nation currently enjoys. The Qur’an forbids usury or the ‘ruinous’ charge of interest – ‘ruinous’ is up for interpretation – and binds deals to be carried out solely on tangible assets i.e. banning the trading of financial derivatives and securities. This meagre scope for investment and arbitrarily castigatory restrictions on previously-established firms would have far reaching consequences. All this entails a swing to more economic nationalist policy, obstructing Egypt’s honed trade links and thinning the lifeblood of its Tourism industry, which in 2008 received 12 million visitors, employing 12pc of the labour force. Another principal asset up for examination is the Suez Canal – a crucial maritime artery that connects the Mediterranean and Red Sea. Being a substantial trade route that bears witness to the mass shipping of oil; it nonetheless forms another fixation for US foreign policy.

Whether blocking the path to democracy and flouting an incandescent electorate will result in more short term politico-economic stability is desirable or not; US and foreign influence cannot defy the changing face of contemporary Egyptian society. Radical fundamentalism is undeniably a dominant issue in this legacy and the omens are foreboding if Mubarak’s rule is usurped hastily. At this moment however, one can only watch from the sidelines as Egypt totters to an era-defining climax in its history. For now, it’s best to follow suit with international investors and suspend any form of action.